The peak body VicServ said “hundreds” of mental health workers were losing their jobs, with no guarantees they would pick up work with new providers.

But the premier, Denis Napthine, said mental health funding and staffing had increased since the Coalition came to power in 2010.

A number of Victorian mental health service providers did not win contracts under the new system, meaning they have to cut staff. VicServ’s chief executive, Kim Koop, said the reforms were necessary but they put a large part of the workforce on the move.

“What that means is you’ve got an even larger number of clients, who rely on those workers, who are changing workers,” Koop said on Tuesday.

Napthine said staff numbers in community mental health had increased since 2010. “Mental health is a challenging area, and there’s always a higher turnover of staff in those sort of challenging workplaces,” he told Fairfax radio.